The Hindmarsh Shire is one of seven councils in western Victoria backing a campaign for a feasibility study to re-establish passenger rail services.

Councils including Horsham, West Wimmera, Yarriambiack and Northern Grampians are advocating for better public transport to support community growth.

This week, Hindmarsh councillors voted to allocate $4,000 in its budget to contribute to the financial study for trains west of Ararat.

One of the options under consideration is using a shuttle service to link the existing V/Line service from Ararat via Ballarat to Melbourne on broad gauge.

Hindmarsh Shire Mayor Rob Gersch says the lobbying is not the result of the Victorian Government's Murray-Darling Basin freight rail funding in this month's budget.

"These negotiations have been going on for quite a while and council have met over a period of time and it was felt that it was time for action, so it's coincidental the timing of the program," he said.

He says the consortium has been in talks with transport authorities and will work on a business case to support the proposal.

"There's eight councils that are working together and we feel it's time to put a plan together and do some lobbying and fortunately these days it costs money so what council has committed, along with other councils that are interested in upgrading this passenger line, we will be contributing $4,000 each," he said.

Meanwhile, Hindmarsh Shire has welcomed plans for the food handler GrainCorp to expand its Bow Hill storage facility near Rainbow.